Optimum Communications (OPTU): Evaluating a Tender Offer Arbitrage
Investment management company Curreen Capital released its second-quarter 2026 Investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned 22.26% compared to 15.20% for the S&P 500 Index. The performance was driven by active special case investments, including buying a tender offer, a merger-spinoff, and investments in affordable turnaround opportunities. The fund continues to hold spinoffs of reliable businesses at favorable price ratios and non-spinoff businesses that are undervalued compared to their downside valuation. In addition, please check the firm's top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Curreen Capital highlighted Optimum Communications, Inc. (NYSE:OPTU). Optimum Communications, Inc. (NYSE:OPTU) is a telecommunications company that provides broadband internet and video services under the Optimum brand. On August 10, 2026, Optimum Communications, Inc. (NYSE:OPTU) closed at $0.78 per share, reflecting a market capitalization of $305.82 million. Optimum Communications, Inc. (NYSE:OPTU) posted a one‑month return of -22.66%, while its shares lost 64.97% over the past 52 weeks."
Curreen Capital stated the following regarding Optimum Communications, Inc. (NYSE:OPTU) in its Q2 2026 investor letter:
"The Tender Offer: In June we bought a small position in Optimum Communications, Inc. (NYSE:OPTU) after the company announced a tender offer for its own shares. The company was offering to buy back about 40% of its shares at a fixed price of $2.50 per share. This was well above the $0.60–0.70 that the stock had been trading at prior to the offer announcement, and the math was attractive at the $1.10–1.20 where it was trading soon after. If we were paying $1.10–1.20 per share and could get $2.50 for 40% of our shares in the tender, then we could sell the remaining 60% of shares (those which would not be accepted in the tender offer) at a low price and still come out ahead.
The driving force behind the tender offer was Patrick Drahi (whom you may know from Altice). Fun fact: Optimum Communications changed its name from Altice USA in November 2025. Optimum is a heavily indebted cable company that appears headed for financial restructuring. My view was that Drahi's plan was to use the tender offer to consolidate voting and economic control over Optimum. This would enable him to negotiate freely with the company's lenders, and to reap any economic benefits that came from those negotiations. The next step in his plan was to complete the tender offer. So the answer to my question "why does this opportunity exist?" was "Because Patrick Drahi has the means and motive to make it happen."
Overall, the tender offer appeared to offer downside protection, with the potential for us to make a profit. The tender offer worked out well for us. We put about 3% of the fund into Optimum Communications, paying $1.131 per share. The company bought back about 48.6% of our shares at $2.50 in the tender offer, and we sold our remaining shares at $1.28 per share after the dust settled in early July. Our overall proceeds were $1.873 per share."
Optimum Communications, Inc. (NYSE:OPTU) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 41 hedge fund portfolios held Optimum Communications, Inc. (NYSE:OPTU) at the end of the first quarter, up from 39 in the previous quarter. While we acknowledge the potential of Optimum Communications, Inc. (NYSE:OPTU) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.